DIAN REVENUE RULING

DIAN REVENUE RULING

An investment in Non-Conventional Energy Sources made through a financial lease, cannot receive the tax benefits of Law 1715 of 2014 if the lease agreement was signed prior to the enactment of said law

Under this assumption, the requirements to acquire the tax benefit recognized in Article 11 of Law 1715 of 2014 are not met

Through its Revenue Ruling No. 14749 of June 13th 2016, the Colombian Tax Authority—DIAN- refers to the case in which investments in Non-Conventional Energy Sources (FNCE) made using financial lease agreements occur based on an agreement signed prior to the entry into force of Law 1715 of 2014.

DIAN considers that a financial lease agreement signed before the entry into force of Law 1715 of 2014 does not meet the requirement of being a new investment in FNCE. Likewise, DIAN assumes that the contract was not signed with the purpose of making expenditures in research, development and investment in the field of production and use of FNCE or efficient energy management, considering that when the lease agreement was signed the law had not yet entered into force.

It is important to note that the law provides that investments made through leasing arrangements must meet the requirements therein, such as that the financial leasing agreement establishes an irrevocable purchase option of the investment, that the tenant exercises this option at the end of the agreement, and that the investment is certified by the Ministry of Environment.